“This is a major step in the development of the Boikarabelo mine, which is expected to begin production in late 2013,” ResGen managing director Paul Jury said.

“We expect the mining right will facilitate our discussions with Eskom regarding coal supply to its power stations and with Transnet regarding transport to domestic customers and ports.”

The project has plenty of scope for expansion and holds 745 million tonnes of probable reserves based on 35% of its identified resource area.

First-stage development is targeting 12Mtpa run-of-mine over five years, with half the 6Mtpa of thermal coal slated for export markets.

Depending on offtake arrangements, ResGen would ideally like to ramp up the open cut mine to 40Mtpa ROM under second-stage development.

ResGen shares were up 4c to 98c by early afternoon.